Hyundai Merchant Marine has to sell its LNG transport business to a local investment company for $1.03 billion. The South Korean marine transportation company has financial problems and quickly must find money to pay its debt. Hyundai Merchant Marine is reporting for a 3rd year of loss. The global economic crisis weakened the company. There is only one option available, selling the LNG transport business. Hyundai Group needs funds to escape the financial trap.
Hyundai Merchant Marine is one of the South Korea's biggest shippers by market share, Hyundai Group will not leave the company and will support it in this difficult period. IMM Investment Corp has been chosen as the preferred bidder for the liquefied natural gas transport business of Hyundai Merchant Marine. The end date of the deal is expected to be somewhere in the first half of 2014. After the deal was announced to the public, share of the company rose around 12%. The LNG transport business of the South Korean company was successful in the past carrying 20% of the country's LNG import. Hyundai Merchant Marine has in its fleet 10 vessels which were under long-term contracts with the company Korea Gas Corp. (state owned).
The company informed in a statement:
"The sale... is our best option to restore market confidence, and we will concentrate our efforts to improve competitiveness in containers and bulk carriers going forward."
IMM Investment has not commented the situation around the deal.
Hanjin Shipping Co Ltd is one of the biggest competitors to Hyundai Merchant Marine and also has the intention to sell part of its bulk carrier fleet and other assets in order to find money to plug losses.
Hyundai Merchant Marine is located in South Korea. It is a logistics company which offers global container shipping services. It was founded in 1976 under the name: Asia Merchant Marine. Later the company's name changed to Hyundai Merchant Marine as a part of the Hyundai Group, in 1982.